Credit Risk Measurement In The Local Government Bond Issuance Process And The Financing Scale

In the modern society,the government bond that the government borrow capital from the market based on the national sovereign and economy are the major type of the national credit.The municipal bonds are issued by the municipal governments or the authorized agencies as financing method.The capital will be used followed by the guide of the municipal governments.The Chinese government in response to financial crisis,put forward by the end of 2008 to 4 trillion yuan investment plans,followed by the local reporting a total of up to 18 trillion yuan investment plans.After the reform of the tax system where limited financial resources,it is difficult to cope with such a large-scale investment spending. Therefore the central government attempts to liberalize the issuance of local bonds to solve the local finance the incremental capital,but the local public debt is the credit risk of the local governments to issue bonds or investment income,income there is a huge uncertainty.In this paper,combined with the financial crisis environment,emerging out of things-local bond credit risk concerns,from government policies,international experience,as well as bond financing of local-scale empirical studies measure the local bond issue in the process of credit risk,in the empirical the process of upgrading a major application of the KMV model and the first-order autoregressive model to study the appropriate size of the debt,in part by the empirical research we can be found,local bonds can not be ignored with the credit risk(default risk),the credit risk of issuing bonds greater sensitivity of the scale,with the probability of default of debt and to accelerate the expansion of the scale increased.At the same time,China's actual experience with the international credit risk for local control of public debt made a series of policy recommendations,and gradually formed a credit rating system,the information disclosure system and bond insurance system for the contents of the credit management "troika" of the basic framework,and protection through the establishment of bond funds,bond banks,and claims a more perfect market to market to reflect the true price of bonds,at the same time the Government needed to increase the relevance of the bond issuer regulation.